Energy Transfer combines a 6.4% yield, improving leverage, and AI/data-center and NGL export growth with an 8.3x EV/EBITDA valuation that leaves substantial five-year upside.
Overview
Energy Transfer LP is a diversified North American midstream partnership with approximately 140,000 miles of pipelines across 44 states, linking every major U.S. hydrocarbon basin to demand centers and export terminals. Its five operating areas span intrastate and interstate gas, gathering and processing, NGL/refined products, and crude oil. **The key quality attribute is that approximately 90% of Adjusted EBITDA is fee-based**, supported by long-term take-or-pay, reservation, and volumetric contracts. Q2 2026 demonstrated strong momentum: revenue rose 78.4% year over year to $34.334 billion, Adjusted EBITDA increased 31.0% to $5.070 billion, DCF rose 32.14% to $2.590 billion, and EPS increased to $0.59 from $0.32. Management raised 2026 Adjusted EBITDA guidance to $18.8-$19.1 billion and organic growth capital to $5.6-$5.9 billion. Growth catalysts include AI data-center gas demand, the 6+ Bcf/d contracted power pipeline, Hugh Brinson, and Nederland export expansion. At $21.31, ET offers a 6.4% distribution yield, approximately 1.8x coverage, and an 8.3x forward EV/EBITDA multiple versus EPD at 10.7x.